The overall objective of this proposal is to understand thoroughly the mechanisms by which dual-specificity protein tyrosine phosphatases (DS-PTPs) inactivate the MAP kinases ERK1 and ERK2. Although, the pathways leading to ERK activation have been well described, down-regulating mechanisms involving protein phosphatases remain largely unknown. Recently, two DS-PTPs (VHR and MKP) have been described as specific but distinct ERK phosphatases. VHR is a single domain, tyrosine-specific and nuclear ERK phosphatase. In contrast, MKP3 is a two-domain, dual-specific and cytoplasmic ERK phosphatase. In this proposal, cellular and biochemical approaches will be utilized to explore the diverse mechanisms by which these DS-PTPs down-regulate the ERK signaling pathway. Specific aim 1 will be explored in detail and the cellular function of VHR in the ERK signaling pathway. The molecular mechanisms of ERK dephosphorylation by MKP3 and VHR will be determined in Specific aim 2. Specific aim 3 will focus on identifying the physical basis for the dramatic activation of phosphatase activity when MKP3 binds unphosphorylated ERK. In Specific aim 4, protein co-crystallizations will be initiated for future X-ray structural determinations of the complexes between VHR/ERK and MKP3/ERK. The investigation outlined in this proposal is a logical mix of physiological function and molecular mechanism. The unique characteristics of VHR and MKP3 offer a tremendous opportunity to understand the cellular mechanisms that down-regulate the ERK pathway.